Lets talk first about Qualifying Wages For Employee Retention Credit :
Our team here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly supply a lovely breakfast and have people really find out about the program we should head to the space where we have the ability to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I mean you understand if you just begin to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest consider how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything till they really get the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has actually been ended up and the number of you think you’ve processed because you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you require experts on the other end of the phone to process this and get it to where you get among these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re speaking about something truly essential today the employee retention credit which the majority of you have never ever become aware of I certainly had not heard of it until extremely recently and learned a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call up your bank manager and state give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund alright go on sorry I just have to make sure we got that point I mean that’s a huge distinction a loan versus cash money I like money cash that’s what we’re discussing alright and the other loans are done so we’re sitting here in 2023 and the eidl is over the PPP is over and the only one left from the original cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get real money from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker retention credit that individual had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have owned a business however it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part cash how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus since the turmoil of the pandemic so they wished to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of cash it is now there’s a caveat here the PPP money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big concern is why does no one understand about this due to the fact that appearance when I first found out about this when I first met Josh you understand I’ve got great deals of investments in lots of business I’m a major advocate for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I don’t believe it since I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well should have and we used them wisely to survive during the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even called to my politician buddies Guv Senators they didn’t understand about it I imply that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was turmoil due to the fact that remember in the original cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, employer whose service is fully or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether a company had, on average, basically than.
100 workers in 2019.
Companies that specialize in ERC filing assistance normally provide proficiency and assistance to help organizations navigate the complex process of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Qualifying Wages For Employee Retention Credit
Eligibility Assessment: These companies will evaluate your service’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. They can help identify if you satisfy the requirements for the credit and determine the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based on eligible wages and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the necessary types and documentation in your place. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have developed with time. These business remain updated with the latest modifications and make sure that your filings comply with the most existing standards. They can also provide ongoing support if the IRS requests extra info or conducts an audit related to your ERC claim.
It is essential to research and vet any business offering ERC filing support to guarantee their reliability and competence. Look for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who offer ERC filing assistance.
Remember that while these business can provide important assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate companies to keep and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, employers must satisfy one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As pointed out earlier, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of certified wages paid to workers, consisting of specific health plan costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. Nevertheless, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, permitting qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Type 941. The excess can be reimbursed to the employer if the credit exceeds the amount of employment taxes owed.
It is necessary to note that the ERC arrangements and eligibility requirements have actually developed over time. The very best strategy is to consult with a tax professional or check out the official internal revenue service site for the most current and comprehensive details concerning the ERC, including any current legislative modifications or updates.
To get approved for the ERC, an organization should fulfill one of the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and services that got a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves finishing the essential forms and including the credit on your work tax return (typically Kind 941). The exact time it takes to process the credit can differ based upon a number of factors, including the complexity of your organization and the workload of the internal revenue service. It’s suggested to talk to a tax professional for guidance particular to your situation.
There are several companies that can help with the process of claiming the ERC. Some widely known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based on general understanding and might not show the most recent updates or changes to the ERC. It’s important to speak with a tax expert or visit the official internal revenue service site for the most accurate and up-to-date details regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. If the employer had 100 or less employees on average in 2019, then the credit is based.
on wages paid to all workers whether they really worked or not. Simply put, even if the.
employees worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
enabled only for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply cash payments however likewise a part of the expense of company.
provided healthcare. Qualifying Wages For Employee Retention Credit
Companies can be instantly reimbursed for the credit by lowering the amount of payroll taxes they.